Ford CEO's pay falls to $20.95 million in 2012

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DEARBORN, Michigan (AP) - Ford Motor Co. CEO Alan Mulally's compensation fell 29 percent to $20.95 million in 2012 as the company's board weighed record North American profits and quality improvements against heavy losses in Europe and lower market share in the U.S. and elsewhere.

Mulally earned $2 million in salary, the same as he earned in 2011. But his bonus fell 27 percent to $1.3 million and his stock awards dropped by half to $6.8 million.

He received $7.5 million in stock options, the same as in 2011. His bonus under Ford's incentive bonus plan for executives fell 28 percent to $2.6 million.

Mulally also received $680,809 in other compensation, including the use of a private airplane, housing expenses and security. That was up slightly from 2011.

Ford reported a record $8 billion pretax profit in North America in 2012, as its sales rose and it made more money for every vehicle. But the company's net income fell by $300 million to $5.66 billion, largely because of a $1.75 billion loss in Europe. The board noted that Ford is restructuring its European operations, but the company still expects to lose $2 billion in the region this year as it struggles with lower sales, closes factories and invests in new vehicles.

The company's board also docked the pay of Mulally and other executives because the company didn't meet market share goals in any of its global regions.

But the board noted several accomplishments. Ford resumed paying a dividend last year for the first time since 2006, and two ratings agencies returned the company to investment-grade status last spring. The board said vehicle quality - measured by warranty costs and other factors - also improved.

The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.

Ford also announced in its proxy that its annual meeting will be held May 9 in Wilmington, Del.